The comments last week by Ben Bernanke, United States Federal Reserve chairman regarding good prospects for a return to global economic growth in the near future has showed its impact on the FTSE 100 index of leading shares that soared to 4896.23, up 45.34 points, highest in the last 10 months.
Actually Ben Bernanke had said that America was on the brink of escaping world’s worst recession since Second World War. It was the biggest summer equity rally in London market since 1984, the year in which the FTSE 100 was opened.
US home sales also recorded better-than-expected increase during the previous month.
In early trading, indices across Europe were showing gains and the Dow Jones Industrial Average was up by 0.7 per cent, while in France the Cac 40 gained 1 per cent.
Germany's Dax also soared by 0.8 per cent.
Owing to prevailing optimism in the market, oil kept hanging around $75 per barrel.
Head of IG Index, Tim Hughes, said, "With the optimism today extending from Asia, through Europe and – in early trading at least – on to Wall Street, further gains seem pretty likely in the medium term."
Royal Bank of Scotland gained 7 per cent to settle at 51.75p, while Lloyds Banking Group soared to 107.97p, up 6.39p.